California SCO v. SAP

DisputeSoft was engaged as a consulting and testifying expert in March 2013 by the California State Controller’s Office (SCO) in the matter of California State Controller’s Office v. SAP Public Services, Inc. The SCO alleged that SAP had breached a software implementation contract as well as the covenant of good faith and fair dealing in connection with the implementation of a new human resources and payroll system for approximately 240,000 California state employees. The system was known as the “MyCalPAYS” system, and it was intended to replace the State’s existing legacy system. In February 2013, SCO terminated its $90 million implementation contract with SAP after an unsuccessful eight-month pilot involving approximately 1,500 state employees. Litigation ensued.

After analyzing defects, issue logs, testing plans, project schedules, deposition testimony, and other project documentation, DisputeSoft reached the opinion that the SCO was justified in deciding that the MyCalPAYS system was not prepared for state-wide deployment and that termination was a prudent course of action. Managing Partner Jeff Parmet proffered an Expert Report on behalf of the SCO on November 30, 2015, and gave deposition testimony on February 3-4, 2015.

Just prior to trial, the State Controller’s Office entered into a Settlement Agreement with SAP on June 6, 2016, under which SAP agreed to pay $59 million to the State and drop its $23 million breach of contract claim against the State. Neither party has admitted fault with respect to any claim.